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Looking ahead

November 2014

An update on forthcoming cases, consultation responses and key developments to look out for, including the latest on:

- Review of the Rehabilitation Code
- Social Action, Responsibility and Heroism Bill
- Guidance for the experts' instruction
- Diffuse Mesothelioma Payment Scheme (Levy) Regulations
- Civil Justice Council review of Damages Based Agreements

Forthcoming cases

Motor insurance: EU obligations The DfT is appealing the High Court’s decision from June in Delaney v The Secretary of State for Transport in which the claimant was awarded Francovich damages on the basis that the exclusion of the MIB's liability to passengers known as the "crime exception" was in breach of EU obligations. The hearing is due to take place on 10/11 February 2015.

Mesothelioma: Recovery of Medical Costs Asbestos Diseases (Wales) Bill On 14/15 May the Supreme Court heard submissions on whether the National Assembly for Wales has the power to enact the Recovery of Medical Costs Asbestos Diseases (Wales) Bill, passed in November 2013. The Counsel General referred the Bill to the Supreme Court in December 2013 following argument from the insurance industry. The Supreme Court’s decision is awaited.

Mesothelioma: insurance On 15/16 July the Supreme Court heard the case of International Energy Group v Zurich Insurance on whether, under an employers’ liability insurance policy, an insured is entitled to an indemnity from an insurer for the entirety of its outlay in respect of a claim brought against it for mesothelioma by an employee, or only a proportion of its outlay based on the period for which the insurer provided cover. Judgment is awaited.

Costs: additional liabilities The costs challenge in Coventry v Lawrence returns to the Supreme Court in February following Lord Neuberger’s comments in July that the respondents’ liability for costs under the recovery regime may be inconsistent with their right to a fair trial under Art. 6 ECHR. The Supreme Court adjourned the issue to allow the government to intervene.


Claims management companies In August 2012 the government announced its intention for customers’ complaints about poor service provided by authorised claims management companies (CMCs) to be dealt with by the Legal Ombudsman (LeO). In May a consultation was published containing proposals as to how the costs the LeO will incur in dealing with complaints about authorised CMCs may be recovered from the authorised claims management industry. The government has now published its response and is proceeding with the fee framework as set out in the consultation paper. The timetable for implementation of the LeO taking complaints about CMCs has been slightly revised. It is now expected that the LeO will begin taking complaints about claims management companies at the end of January 2015 Read the full consultation response

The following consultations are awaiting official responses:

Whiplash reforms The MoJ’s consultation on the second tranche of proposed whiplash reforms - the independence and accreditation of experts - closed on 1 October and the government’s response is awaited. Find out more by reading Simon Denyer’s early analysis and our recent article Can MedCo do the business?

Rehabilitation code Following its recent call for views on the current Rehabilitation Code, the IUA-ABI Working Party has announced that it hopes to make available for consideration a draft of the revised Code in March 2015 with a view to publishing the final version by the end of June. Read more in our update Draft Rehabilitation Code to be published in spring 2015

Reform of the Riot Damages Act In response to the August 2011 riots and subsequent report by Neil Kinghan in September 2013, the Home Office held a consultation on proposed changes to the Riot (Damages) Act. A new Bill would reform the existing 1886 Act, improving and modernising the way compensation is paid to individuals and businesses who experience losses or damage to property during riots. The main elements of the Bill include the placing of a cap on payments to very large businesses and their insurers and the establishment of a Riot Claims Bureau to handle claims. The consultation closed on 1 August and the ABI published its response voicing concern over the proposals and arguing that state support for riot victims needs to be maintained not curtailed. See ABI press release. The government’s response is awaited.

Pre-action protocols As part of its ongoing work on updating the pre-action protocols the CPRC has recently consulted on proposed changes to the pre-action protocols for personal injury, judicial review and debt claims. The Committee’s intention is for the revised protocols to come out as a group at the same time as a revised Pre-action Conduct Practice Direction.

Both discount rate consultations The first consultation on the methodology in setting the discount rate closed in October 2012 and the second, on the legal framework closed in May 2013. On 26 August it was revealed that the Secretary of State, Chris Grayling, had decided to appoint a panel of three experts to prepare a report giving expert investment advice to use within the discount rate review. The three experts are to be an expert in the financial management of investments including as to what investment advice and services are provided to claimants; an actuary who can deal with issues regarding the rate; and an academic who knows the workings of the financial services market including aspects relevant to the economic cycle. The panel was expected to be appointed by 22 September and then in the second half of October but there is still no news on the appointment.

Court fees increase In December 2013 the MoJ consulted on proposals to increase court fees. The aim of the proposed fee increases is to move to a position whereby the Court Service becomes self-funding. There were two parts to the consultation: 1) proposals to increase fees to reflect the actual cost of providing the service, 2) the proposed introduction of “enhanced fees” whereby parties in certain types of proceedings would be expected to contribute more than the cost of providing the service. The rationale behind this is that those who use the courts should make a greater contribution where they can afford to do so. The government has responded to the first part of the consultation and those fee increases have now been implemented. A response is awaited to the second part.

Health & Safety at Work Act 1974: self-employed workers Following recommendations made by Professor Löfstedt, the HSE is consulting on proposed amendments to section 3(2) HSWA1974 to exempt certain self-employed persons from health and safety law. The consultation closed on 31 August. Find out more about the consultation including the draft amendment. 

Also on the horizon...

Social Action, Responsibility and Heroism Bill June saw the introduction of this Bill which is designed to take further steps to level the playing field in favour of employers who have done all that is reasonable to protect employees, and to ensure that people who volunteer and carry out good deeds should not be put off by worries about risk and liability if something goes wrong. At every stage in the Commons there has been opposition to the Bill on the basis that the legislation is not required, whereas the government maintains that the Bill introduces genuine change: obliging courts to consider whether someone "took a generally responsible approach to safety". This opposition has been carried over into the Lords where an unsuccessful attempt was made to deny it a second reading. The Bill now moves to committee stage on 18 November, for line by scrutiny, in the Lords. In the meantime the Labour MP Paul Flynn has tabled an Early Day Motion calling on the government to drop the Bill. So far, he is the only signatory.

Guidance for experts’ instruction In August the Civil Justice Council (CJC) published revised Guidance for the instruction of experts in civil claims to replace the Protocol on experts (which currently forms part of Practice Direction 35 of the Civil Procedure Rules). It did not come into force as expected in October but it will come into force on 1 December 2014 with the 76th CPR update. Read the Guidance

Inquiry into mesothelioma claims and Asbestos Victims Support Group Forum judicial review: In April the Justice Select Committee announced a short inquiry into the appropriateness of the decision to apply the LASPO provisions to mesothelioma claims which would mean the end of recoverability of success fees and ATE premiums with effect from July 2014.  The Committee heard oral evidence from a number of stakeholders and from Lord Faulks QC, Minister of State for civil justice. The Committee published its report on 31 July with the main recommendation that the government should carry out a further review with an additional consultation before implementation of the LASPO reforms. At the beginning of October, the judicial review was determined in favour of the AVSG on the basis that the government did not properly review the position before deciding to end the exemption. The government’s response is awaited.  You can read Derek Adamson’s comments on the judicial review here  

Mesothelioma (Amendment) Bill This Private Members' Bill from Lord Alton had its first reading in the House of Lords on 17 July. The Bill seeks to amend the Mesothelioma Act 2014 so as to include provision for research of the disease within the levy. A date for the second reading has yet to be scheduled. You can follow the Bill’s progress here

Diffuse Mesothelioma Payment Scheme (Levy) Regulations published These Regulations are the final element of the legislative arrangements for the Scheme. They place an obligation on active insurers to pay towards the cost of the levy based on their relative market share and set out how different payment amounts for different active insurers are determined. The Regulations were published on 7 November and come into force on 28 November The Diffuse Mesothelioma Payment Scheme (Levy) Regulations 2014

Criminal Justice and Courts Bill: fundamental dishonesty in personal injury claims and ban on inducements We have been following the progress of the clause which introduces a range of provisions where a claim for personal injury is found to be fundamentally dishonest, including dismissal of the whole claim. At the House of Lords report stage the clause was debated and survived unscathed despite attempts to water down its effects. The Bill has now had its third reading in the Lords and it returns to the Commons for consideration of the Lords’ amendments.  The Bill also contains new rules against inducements to make personal injury claims and in the Lords these were amended to cover inducements offered through third parties. Read more in our update Clause 56 retains its bite

Deregulation Bill: self-employed – motor insurance - HMRC records A few provisions in this Bill potentially have an impact on insurers. Clause 1 amends s.3 HSWA1974 to exempt the self-employed whose work activities pose no potential risk of harm to others from health and safety law (from Löfstedt). Clause 9 amends s.147 RTA 1988 so that delivery of the motor insurance certificate or security is no longer required for the policy or security to be legally effective and also removes the requirement for policyholders to return their certificate of insurance or security if a policy is cancelled mid-term. And the newly introduced clause 67 gives HMRC the power to disclose information in fatal claims without the need for a court order. This measure is designed in particular to improve the process of dealing with mesothelioma claims. Whilst waiting for this measure to go through Masters McLeod and Eastman have issued a practice note for the procedure to be used HMRC practice note (pdf). The Bill has reached Committee Stage in the House of Lords and will next be considered on 18 November. We will continue to monitor progress of the Bill which you can also follow here

Insurance Bill: insurance contracts – Third Party (Rights against Insurers) Act 2010 The Insurance Bill was introduced to Parliament on 17 July. It incorporates some, but not all of the proposals in the Law Commissions’ draft Insurance Contracts Bill and also makes amendments to the Third Parties (Rights against Insurers) Act 2010, so that that Act can be brought into force. The timescale for the Bill to progress through Parliament before the General Election is now tight. Following a second reading at the end of July, the Bill has now been referred to a Special Public Bill Committee empowered to take written and oral evidence before considering the Bill clause by clause in the usual way.

Review of Part 36 offers The subcommittee of the Civil Procedure Rules Committee has completed its review of Part 36 including issues such as Part 36 offers in split trials, sunset clauses, counterclaims and offers which make no real concession.  The sub-committee’s recommendations are now being put before the full committee with a view to any rule changes being implemented in 2015.

Civil Justice Council (CJC) to look at Damages Based Agreements revisions The government has asked the CJC to take a detailed look at some technical revisions to the regulations for DBAs. Notably though, and to the Lord Dyson’s disappointment the government has decided not to permit ‘hybrid’ DBAs. Read more

Guideline hourly rates In July the Master of the Rolls announced his decision following the review of the guideline hourly rates and the main headline was that no changes to the actual rates themselves should be made at this time, because of fundamental shortcomings in the available evidence. The issue has been returned to the MoJ for further thought but it is difficult to know how they will take it forward given the imminent General Election. You can read Simon Denyer’s analysis here



For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.

By Alex Fusco

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.